The Nigeria Employers’ Consultative Association (NECA) has warned the Federal Government to reject calls by the International Monetary Fund (IMF) for introduction of more taxes in the country in view of the negative implications for the economy and socioeconomic wellbeing of Nigerians and other residents.
The association’s Director-General, Mr. Adewale Oyerinde, in a statement on Sunday, pointed out that imposing new taxes on Nigerians, especially consumers, would only spell disaster for an economy struggling to stay afloat.
He stated: “For a private sector already overwhelmed by multiple taxes, the imposition of additional taxes on services will make the business community more vulnerable with a trade-off on growth and job creation.
“More taxes, of course, will weaken the purchasing power of individuals and stifle consumption, with attendant consequences for social cohesion. It may defeat any attempt to widen the tax net as taxpayers would consider tax avoidance measures.
“There will be massive capital flight, and the drive for direct foreign investment could be defeated”, the industrial expert added
The Director-General, however, advised the government to widen its tax net as a strategic fiscal option essential to boosting non-oil revenue in order to addressing the rising cost of governance in the country.
According to the association, one of the problems government at all levels in Nigeria has is the rising cost of governance and if the cost of governance can be addressed decisively, it has the tendency to reduce borrowing since recurrent expenditure will automatically decrease.
On the $800 million loan from the World Bank to serve as palliatives in view of the planned removal of subsidy, Oyerinde pointed out that taking the loan was unnecessary but rather government fix the refineries and make them operational before the fuel subsidy removal to mitigate the negative impact on the economy.
He expatiated: “Already, experts and the polity at large have frowned against the loan facility and have proposed definitive approaches including fixing the refineries.
“Also, investigate without delay the subsidy regime with the view to exposing the alleged corruption associated with it; this should not be a difficult thing for the government to do”, the industrialist added.
It would be recalled that the IMF recently advised the Federal Government to explore tax opportunities in its efforts to fund the yearly budgets rather than borrowing more in its efforts to reduce the yearly budget deficits.
In its latest ‘Fiscal Monitor’ report titled ‘On the path to Policy Normalisation’ the multilateral finance institution projected that Nigeria’s debt would continue to rise and urged the government to remove fuel subsidies and commit the savings to health and education sectors.
